[SMM Analysis] Weekly Review of the Lithium Carbonate Market: Strong Demand Support Drives Continued Rise in Lithium Prices

The SMM battery-grade lithium carbonate index price was 80,530 yuan/mt, up 649 yuan/mt MoM from the previous working day. Battery-grade lithium carbonate was priced at 78,600-82,500 yuan/mt, with an average of 80,550 yuan/mt, up 550 yuan/mt MoM from the previous working day. Industrial-grade lithium carbonate was priced at 77,900-78,800 yuan/mt, with an average of 78,350 yuan/mt, up 550 yuan/mt MoM from the previous working day.

On the supply side, production remained high, with operating rates for both spodumene and salt lake processes staying above 60%. Total production in October is expected to hit a new high. Demand-side performance was even stronger, with simultaneous growth in the NEV and ESS sectors continuously boosting material demand, and operating rates at downstream material plants continued to rise. Although lithium chemical plants exhibited reluctance to sell amid rising prices, leading to mediocre actual market transactions, upstream inventory dropped to low levels under the influence of increased long-term contract volumes and trader stockpiling, showing a clear destocking pattern in the market.

Overall, the current market is experiencing growth in both supply and demand, but demand growth is more pronounced, driving prices to rise consecutively. In the short term, supported by low inventory and strong demand, lithium carbonate prices are expected to hold up well.